...assuming someone has the capital and use for the buildings to want to buy them, of course. But CNBC probably hasn’t thought that far ahead yet.
Wow, the state gets 2 plus billion, drops maintenance costs, and gets taxes going forward. A triple.
( Probably going to have crap union built, hooked up hack contractors build new 20 billion dollars buildings to replace them. )
Government wouldn’t build themselves things they didn’t need, would they?
Probably worth $ 3.2 B on the open market
There is no questions that over time it will cost the state more to lease the very same buildings. But given the corruption in the state legislature, it allows them to avoid the budget spending decisions that they should be making to day. Most of the politicians in Sacramento would sell their own mothers to brothels to get elected, or to avoid necessary budget decisions.
I am not a fiancial genius (nor do I play one on TV) but all I see this doing is borrowing money from the future and paying it back over time. Sort of like a payday loan.
The people and functions that go on within those building is not going away. The state will still need them. Right now they are (I presume) paid for.
While it is true that the states loses any property tax on the property, and that they must pay the maintenance on the building I think it would also be true anyone that buys them will include those cost into the rent.
This is just another way to kick the can down the road without solving the basic problem, the state of California is spending more than it can afford.
Time for a federal version of this story - take loads of land, pass along mineral rights and get off the land for the benefit of the people. We ahve so many office building that are poorly used it is a crime. Plus if you make people work in smaller spaces you start the process of closing down branches then departments - we got in this mess little by little we get out chunk by chunk.
A company I once worked for did this, sold their headquarter building and leased it back. It does help with short term cash flow.
Just think what Arnold could have got for them five years ago. IMO, this is planned malfeasance.
The real estate is the smaller problem. It costs money to house people, whether you own or leaseback the facility.
But it costs far MORE to pay and benefit and pension the overpaid, overpensioned lazy worthless slugs who populate government office buildings.
Save money means cutting, slashing the ranks of government workers up and down.
Cut headcounts, cut salaries, cut benefits, cut pensions. Cut, slash, cut, slash.
Then the real estate issue becomes simple: The property is surplus, for there is no need to own or lease vacant space.
Only a fool would buy a building in San Francisco.